The legal profession of China in a globalized world: innovations and new challenges

ABSTRACT

The legal profession is undergoing fundamental changes; and this is the case not just in established legal markets. Based on a state-of-the-art sketch, this paper identifies and analyzes the latest innovation initiatives and alternative business models in China’s legal profession. It finds that, propelled by market demands and benefiting from technological advancements, the provision of legal services has become highly versatile today, giving rise to various alternative service providers, especially the rapidly rising online legal service portals. Because they are technically not law firms, the exclusivity requirements on lawyer ownership and legal service provision are not applicable to them. In the meantime, the competition for large corporate clients and lucrative business transactions is fierce and will continue to be so, not only within the club of big Chinese corporate law firms, but also between Chinese law firms and international law firms globally. In this course, some leading big corporate law firms in China are observed to have creatively incorporated key corporate features in running their business and compensating their partners, effectively deviating from the partnership?+?pure legal services regulation. Such market realities question the necessity and effect of the regulatory restrictions on law firm legal form and ownership structure, and call for an agenda for related research in the future.     

The Changing Structure of Opportunity: Recruitment and Careers in Large Law Firms

Growth and bureaucratization have begun to transform patterns of recruitment and career development in large law firms. Based on a case study of four large Chicago firms, this article examines these changes and their implications. The findings indicate that the social composition of large firms has become substantially more heterogeneous with respect to the status of law school attended, gender, and ethnoreligious background. However, data on lawyers' careers suggest that associates entering firms today face an increasingly bureaucratic organizational context marked by higher levels of turnover, earlier and more intensive specialization, decreased levels of client responsibility, and more frequent assignment to large-scale litigation. The article also addresses the dynamics of individual choice over type of work performed in firms. Lawyers initially working in litigation fields are far more likely to change fields of practice than are lawyers who begin in office practice fields, reflecting the increased tendency for firms to assign new associates to litigation as well as the alienating propensity of large-firm litigation for many associates. Paradoxically, a greater proportion of lawyers in traditionally organized, general service firms than in bureaucratically organized, specialty firms report that their choice of work was dictated by the firm. Also, somewhat surprisingly, the frequency with which firms explicitly direct lawyers into particular fields has not increased from earlier periods. The article concludes that these anomalies result from the fact that firms control the career choices of lawyers, and always have, but that the way such control is exercised varies across firms and historical periods.     

Hiring Teams,Firms, and Lawyers: Evidence of the Evolving Relationships in the Corporate Legal Market

How are relationships between corporate clients and law firms evolving? Drawing on interview and survey data from 166 chief legal officers of S&P 500 companies from 2006–2007, we find that—contrary to standard depictions of corporate client‐provider relationships—(1) large companies have relationships with ten to twenty preferred providers; (2) these relationships continue to be enduring; and (3) clients focus not only on law firm platforms and lead partners, but also on teams and departments within preferred providers, allocating work to these subunits at rival firms over time and following “star” lawyers, especially if they move as part of a team. The combination of long‐term relationships and subunit rivalry provides law firms with steady work flows and allows companies to keep cost pressure on firms while preserving relationship‐specific capital, quality assurance, and soft forms of legal capacity insurance. Our findings have implications for law firms, corporate departments, and law schools.     

Diversity policies meet the competency movement: towards reshaping law firm partnership models for the future

Globalisation, commercialisation, and economic pressures following the global financial crisis have produced a ‘new normal’ for the practice of law in private firms, requiring reassessment of the range of skills necessary for success. Scholarship in the ‘competencies movement’ has responded to this need for skills reassessment. At the same time, research and scholarship focused on increasing diversity and inclusion in law firms has blossomed. However, little attention has been paid to analysing synergies in the competencies and diversity movements, and there have been calls for more collaborative research between academics, firms and professional bodies in response to issues of diversity and inclusion. This article presents a collaborative research project between law firms, the Women Lawyers Association of New South Wales, and the Legal Intersections Research Centre at the University of Wollongong on current best practices in diversity in large Australian law firms. It argues that such collaborative projects, with a focus on synergies between the competencies and diversities movements, provide the greatest potential for reshaping law firm practice and partnership models to respond to issues of advancement, attrition, and lack of re-engagement, particularly by women in law firms.     

Are we there yet? Best practices for diversity and inclusion in Australia

ABSTRACT

This article reports on the findings of a pilot research project investigating current best practices, operating within national law firms in Australia, that support women lawyers in their advancement to partnership and other leadership positions. Academic research and professional body reports suggest that current diversity and inclusion (D&I) initiatives across the private sector are not resulting in significant change to advancement, retention and attrition of women in the legal profession. However, work done by the Women Lawyers’ Association of New South Wales in Australia, through the Data Comparison Project (DCP), indicates that some firms have made better progress than others. Building on the DCP, this article presents the findings of a pilot project involving in-depth interviews with four of the top-achieving national law firms in Australia on gender equity criteria. It finds that these firms are collectively engaging with many of the best practice initiatives for D&I recommended by the current national and international research and scholarship, and in some instances go beyond international best practice. What is apparent, however, is that the current best practices have yet to achieve significant advancement of women, or to break through the glass ceilings that continue to operate for women in large Australian law firms.     

Private Law Firms in the Public Interest: The Organizational and Institutional Determinants of Pro Bono Participation, 1994–2005

Despite longstanding concern that the commercialization of legal practice is antithetical to professionalism, corporate law firms have dramatically increased their pro bono participation over the past few decades. What explains this paradox? This article examines the organizational and institutional determinants of pro bono participation across an elite field of large law firms. I find that pro bono work is only partly rooted in internal organizational dynamics and that the institutional environment appears more important for explaining variation in pro bono participation. These findings indicate that large firms may be more drawn to pro bono work as a social process tied to professional status and legitimacy than to concrete, rational organizational goals. Moreover, these findings point to the importance of the interstitial space that these firms inhabit between the legal profession and corporate market as an especially important factor in facilitating, rather than dampening, pro bono participation.     

Measurement and Growth of R&D Within the Service Economy

Twenty-five years ago, industrial performance of research and development (R&D) was primarily an activity undertaken by large traditional manufacturing firms. Only about 3 percent of the R&D conducted in industrial labs was done by service sector firms. By the late 1990s, however, such firms accounted for approximately 30 percent of the Nation's total industrial R&D expenditures, with a fairly large amount of the effort being directed toward the development and use of information technologies. Industry's increasing reliance on research and technology outsourcing also apparently has contributed to the service sector's substantial R&D expansion. This paper documents recent trends in US non-manufacturing R&D expenditures, highlighting their growth and focus and the difficulties in measuring these trends, as available from national R&D statistics. Broad comparisons with trends and concerns identified through other countries' surveys of service sector R&D are presented.     

Why Are There So Many Lawyers? Perspectives on a Turbulent Market

The venerable legal profession has emerged, over the past generation, as one of the nation's fastest growing occupations. In this paper, we suggest that this fact is not mere happenstance, but is part and parcel of other fundamental changes in the "legal services industry." We attempt to define and clarify these changes by presenting time series data on a number of these developments, including the growth of law as an economic sector, the increasing concentration of law firm activity, and income trends among lawyers. We then offer a simplified demand and supply analysis of the market for lawyers, concluding that several interrelated factors fostered the lawyer boom. In the paper's final sections, we speculate about the forces causing a spiraling demand for legal services and a growing inequality of incomes between the elite firms and sole practitioners.     

中国30年来的宪法学教学与研究

上世纪70年代以来的中国宪法学教学和研究,从根本上说是围绕着反映经济社会发展要求的82宪法的形成、解说、实施和修改进行的,当然也在很大程度上受到后者发展状况的局限.中国的宪法学教学和研究得到了快速发展,但总体水平还比较低,其主要原因在于中国的政治体制改革相对滞后,宪政实践还不能提供必要而足够的研究资源,宪法学教学和研究缺乏现实的推动力.近年来,中国宪法学教学和研究出现了一些新的发展趋势.这些新的发展趋势适应了现阶段中国经济社会发展的要求,引领着中国宪法学教学和研究的新方向.     

The changing landscape of legal practice – some of the challenges ahead

In recent years, there has been a rapid growth in the number of multinational law firms. These firms have offices in various jurisdictions worldwide. At the same time, we have seen a growth in the outsourcing of certain legal work to countries, such as India and SE Asia. This is indicative of the globalisation of law. However, it raises problems, especially in terms of the potential for conflicts of interest. This article looks at these developments in light of existing professional practice rules as they apply in Australia as well as other selected jurisdictions. The author concludes that there is a need for a more international regulatory framework in order to respond to these changes.     

Who decides on the future of data protection? Role of law firms in shaping European data protection regime

Drawing on theories of European integration and governance and sociological studies on the influence of elite law firms on rule-setting, this paper shows that law firms (a) operate in the area of data protection that is of extreme complexity and requires expert knowledge; and (b) display characteristics similar to other actors who succeeded in influencing agenda-setting and the results of policy-making despite having no formal competence to do so. This article proposes a hypothesis of the influence of elite law firms in EU data protection rule-setting. It argues that the EU data protection sector is prone to such influence as it is by definition transnational and, at some technical and some core points, inadequate to reflect the real data processing practices and therefore is entrenched with uncertainty. Therefore, the research into politics of data protection in Europe cannot disregard the role of these actors in shaping the European data protection regime.     

The Legal Profession as a Social Process: A Theory on Lawyers and Globalization

This article proposes a processual theory of the legal profession. In contrast to the structural, interactional, and collective action approaches, this processual theory conceptualizes the legal profession as a social process that changes over space and time. The social process of the legal profession includes four components: (1) diagnostic struggles over professional expertise; (2) boundary work over professional jurisdictions; (3) migration across geographical areas and status hierarchies; and (4) exchange between professions and the state. Building on the processual theory and using China as a primary example, the author proposes a research agenda for studying lawyers and globalization that seeks to shift the focus of research from the legal elite to ordinary law practitioners, from global law firms to local law firms, and from advanced economies to emerging economies.     

In Dependence: The Paradox of Professional Independence and Taking Seriously the Vulnerabilities of Lawyers in Large Corporate Law Firms

In this article, and drawing on the work of Martha Fineman and others, we deploy a vulnerability lens as an heuristic device to push against the concept of professional lawyer independence as enshrined in statute and promoted by legal services regulators. Using interviews with 53 senior partners and others from 20 large corporate law firms, we show how the meaning and practice of independence are profoundly mediated by the contexts, relationships, and interactions of corporate lawyers’ everyday working lives. Vulnerable to competition from other firms, the demands of clients, the shift over time from ‘trusted advisor’ to ‘service provider', regulatory requirements, pressures to make profit, and so on, these corporate lawyers appeared prone to developing and normalizing potentially risky and irresponsible practices. We therefore argue that a debate about corporate legal regulation is better based upon a richly theorized concept of interdependence that takes seriously the causes and effects of practitioner vulnerabilities in particular circumstances.     

Preparing law graduates for a globalised world

In this article it is argued that law graduates need to be prepared for working in a global legal context. Whether working in global law firms or small, local non-global law firms, law graduates need to have the knowledge, skills and attributes that will better equip them to work within and across multiple, international legal jurisdictions. The purpose of the article is twofold: first, to report on and disseminate research on a collaborative project on internationalising the Australian law curriculum aimed at preparing law graduates for global legal practice, of which the authors were the lead researchers; and second, to discuss and demonstrate the practical application of the proposed curriculum framework to the teaching of Constitutional Law.     

Redefining Corporate Social Responsibility in an Era of Globalization and Regulatory Hardening

Globalization and the growth of multinational enterprises (MNEs) have been accompanied by an increasing call for corporations to take responsibility for their environmental and social impacts, and for greater corporate disclosure and transparency with regard to nonfinancial risks (collectively known as corporate social responsibility or CSR). At the same time, governments have increasingly turned to mandatory obligations for formerly voluntary CSR engagement, a trend we call the legalization of CSR. This article analyzes the “hardening” and legalization of CSR, and considers what this process tells us about norms and assumptions regarding the social responsibility of firms in the United States and around the world. Through our analysis of corporate trends, regulations, and case law from the United States, European Union, China, and India, we argue that the process of legalization and redefinition of CSR through a shareholder primacy lens may, troublingly, undermine the very notion of CSR. In the face of these trends, this article concludes with a redefinition of CSR that includes an express commitment to corporations’ social and ethical responsibility to society.     

Strategic Knowledge Networks: The Case of IT Support for Eurojuris Law Firms in Norway

Law firms are knowledge intensive, and the use of advanced technology may well transform these organizations in the future. To examine knowledge management in Norwegian law firms, a study involving four phases of data collection and analysis was designed. The third phase comprised a survey of Norwegian law firms on the use of information technology to support inter-organizational knowledge management. Two predictors, firm co-operation and knowledge co-operation, were significant. The fourth phase was a survey of Norwegian law firms belonging to the Eurojuris network. The Eurojuris law firms had significantly higher IT use, firm co-operation and knowledge co-operation than the other law firms. There was no significant difference in inter-organizational trust, both Eurojuris firms and non-network firms reported that they trusted other law firms.     

Building Trust: Social Capital, Distributive Justice, and Loyalty to the Firm

Trust is essential to successful business relations, particularly to the efficient operation of law firms. Trust fosters productive working relationships, favorable reputations, and a lucrative clientele. This paper contributes to research on law firm development through a consideration of social dynamics within law firms beyond traditional emphases on trading relationships and community solidarity. We introduce a social capital perspective on the evolution of trust and its consequences for commitment to the law firm. We argue that trust, specifically in the form of perceived distributive justice, is created and nurtured through social integration among law firm members. Yet, for women, who continue to be denied full access to these social networks and professional rewards, trust is undermined. Exclusion and emerging distrust prompt women to contemplate leaving their respective firms. This paper examines the bases of differential levels of trust and their impact on lawyers'intentions to leave practice.     

The Confrontation between the Big Five and Big Law: Turf Battles and Ethical Debates as Contests for Professional Credibility

This article uses interviews and comparative professional histories to explore the stakes of the battle- pre-Enron and seen in reactions to the Enron crisis - between the organized bar and the multidisciplinary practices (MDPs) associated with the Big Five accounting firms and their law firms. The paper examines modes of professional practice - family, Continental corporate law, and the Cravath model – to describe the tensions and potential solutions to maintaining professional legitimacy without appearing too close to business or economic power. The paper then seeks to explain preliminarily why the MDP debate became so strong in the United States despite the fact that the actual threat to U.S. corporate lawyers appeared relatively small. It suggests that the interjection of the Big Five potentially threatened a relatively precarious professional legitimacy with different impacts for different sectors of the bar.     

Globalization as Boundary‐Blurring: International and Local Law Firms in China's Corporate Law Market

The worldwide expansion of international law firms has generated regulatory battles and workplace conflicts in advanced market economies as well as developing countries. This article uses the case of China to explore the changing global–local relationship in the globalization of the legal profession and to understand the role of the government in constituting the corporate law market. The author argues that the globalization of the Chinese corporate law market is a process of boundary‐blurring and hybridization, by which local firms become structurally global‐looking and global firms receive localized expertise. Boundary‐blurring occurs in law firms' workplaces, in lawyers' career trajectories, and in state regulatory policies. It has produced a localized expertise that can be diffused conversely from local firms to global firms and has partially changed their relationship from collaboration to competition. Consequently, it becomes increasingly difficult for the government to make or enforce any substantive policy to clarify the market boundary between these two types of law firms.